NEW YORK — The yield on the benchmark U.S. 10-year Treasury note climbed back above 5% on Thursday, and the dollar rose to a fresh 19-month high, as investors bet on further Federal Reserve interest-rate increases after hotter-than-expected U.S. inflation data.
The 10-year yield rose 11.58 basis points to 5.105% and reached 5.1169%, its highest since October 21, according to Reuters. The two-year yield, which typically moves in step with Fed rate expectations, rose 13.96 basis points to 4.867%, its highest since October 14.
The dollar index, which measures the greenback against a basket of currencies, rose 0.3% to 103.18, its highest since April 2025. The euro fell 0.32% to $1.1053.
The sell-off in bonds followed October consumer price data that came in above forecasts: headline prices rose 0.4% on the month and core prices rose 0.3%. Fed officials this week warned that inflation remains stubbornly elevated, with some signalling openness to a 50-basis-point rate increase if price pressures fail to ease.
Markets are now fully pricing in a 25-basis-point Fed rate increase in December, with a small probability of a larger 50-basis-point move, and some brokerages, including Goldman Sachs, now expect another increase early next year.
Yields also rose after President Donald Trump said Washington does not need a deal with Iran. A 10-year yield above 5% pushes up borrowing costs across the economy, from mortgages to corporate debt.
